Lambodhara Textiles Downgraded to 'Sell' by MarketsMOJO: Poor Growth, Negative Results, and Bearish Trend

Lambodhara Textiles, a microcap company in the textile industry, has recently been downgraded to a 'Sell' by MarketsMOJO on July 15, 2024. This decision was based on various factors, including poor long-term growth, negative financial results, and a bearish technical trend.
Over the last 5 years, the company's net sales have only grown by an annual rate of 2.18%, while its operating profit has only increased by 11.23%. Additionally, the company has declared negative results for the last 5 consecutive quarters, with a significant decline in profits and the lowest ROCE (Return on Capital Employed) at 6.62%.

The stock is currently in a mildly bearish range, with a technical trend that has deteriorated since July 15, 2024, resulting in a -1.73% return. Multiple factors, such as MACD, Bollinger Band, KST, and DOW, also indicate a bearish trend for the stock.

Furthermore, 39.28% of the promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets. In the last 1 year, the stock has underperformed the market, generating a return of only 1.63%, compared to the market's (BSE 500) return of 37.76%.

However, the company does have some positive aspects, such as high management efficiency with a ROCE of 16.08% and a strong ability to service debt with a low Debt to EBITDA ratio of 1.14 times. Additionally, with a ROCE of 4.6, the stock is currently trading at an attractive valuation with a 1.4 Enterprise value to Capital Employed.

Despite these positive factors, the stock is still trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 1.63%, its profits have fallen by -73.4%. Based on these factors, MarketsMOJO has downgraded Lambodhara Textiles to a 'Sell', and investors should carefully consider these factors before making any investment decisions.